WB on path from good governance to humane governance

WB on path from good governance to humane governance

By Muhadi Sugiono

YOGYAKARTA (JP): The World Bank and International Monetary
Fund (IMF) reaffirmed their commitment to the adoption of good
governance. In his closing remark at the annual financial meeting
in Hong Kong on Sept. 25, IMF Managing Director Michel Camdessus
said that good governance constituted a necessity not only for
moral but also for economic reasons.

What Camdessus was referring to when he stressed the
importance of good governance, however, was only one aspect of
good governance which the two financial institutions were
supporting.

It is an aspect of governance related to the provision of
legal and institutional frameworks for the operation of the
market economy related to the World Bank's and IMF's
institutional and managerial roles.

The other aspect concerns a wide range of issues beyond those
technicalities and cannot therefore be publicly endorsed.

Put simply, it is that plus the establishment of civil society
which brings their notion of good governance closer to that of
humane governance.

This article discusses the transformation of the conception of
good governance adopted by the two international financial
institutions, but, for a very practical reason, will be focused
on that of the World Bank.

The bank has long been criticized for its adoption of a
rather narrow conception of good governance, that is, managerial
and institutional issues.

These technical issues usually relate to the formal,
instrumental or substantive (content) requirements for the
existence of a system of law.

They also relate to such policy suggestions as bureaucratic
and public administrative reform, budgeting, public sector's
efficiency and so on.

The bank, however, has every reason to adopt this narrow
conception of good governance. It is officially constrained by
its articles of agreement from dealing with noneconomic issues.

In fact, the designers of the bank, like John Maynard Keynes,
conceived and idealized it as a neutral institution when it came
to interests, politics or ideologies.

The watershed of the bank's conception of good governance
emerged with the publication of its 1989 report, Sub-Saharan
Africa: From Crisis to Sustainable Growth.

The report clearly marked the bank's departure from its
previous thinking on good governance. In the report, the bank
characterized chronic African development problems as a result of
inappropriate economic policies and, more importantly, a 'crisis
of governance'.

What the report means by a 'crisis of governance' is quite
obviously a wide range of political crises as manifested in the
crisis of legitimacy and participation as well as in the crisis
of the implementation of democracy and human rights.

Its finding of the crisis of governance as a key factor in
African development problems inevitably led the bank to suggest
political reforms as much as economic ones.

What most African states needed was 'political renewal', the
report said, that was the construction of a more 'pluralistic
institutional structure'.

This means that, for the bank, the building of civil society
and effective democratic practices must necessarily precede the
attainment of sustainable development.

As a consequence of its expansion of concern, that is to
include its concern on the importance of civil society as part of
good governance, the bank actively supports various voluntary
organizations and non-governmental organizations (NGOs),
universities, trade unions and other society-based organizations.

The bank also vigorously promotes the adoption of
accountability, legitimacy, participation and transparency as
strategies to empower civil society and to reduce the power of
the state.

In short, the 1989 report suggested the necessity to
systematically rebuild those African states from the bottom up.

This clearly indicates that there has been a significant shift
in the bank's conception of good governance since the end of the
1980s, a shift from dealing merely with technical issues to
include more sensitive political issues.

More specifically the bank is increasingly concerned with
civil society and its importance to development.

As such, it is quite interesting to make a comparison between
the bank's current conception of good governance and that of
humane governance, a concept introduced by The World Order Models
Project of the Global Civilization Initiative as written in its
report in 1995, On Humane Governance, by Richard Falk.

What does the shift of the bank's thinking on good governance
mean? Does good governance constitute Falk's humane governance?
How humane is the bank's good governance?

Falk's humane governance is defined as both a process and a
goal. It is a set of social, political, economic, and cultural
arrangements that are committed to rapid progress along these
five dimensions of assessment.

In other words, it is the arrangement to achieve comprehensive
rights for all people on earth, though its main focus of
governance is the most vulnerable and abused.

To the extent of which the bank's good governance is concerned
with the empowerment of civil society, it is undoubtedly a humane
governance of some sort.

The bank's good governance, however, has been criticized for
being derived from a liberal tradition. The bank has been accused
of only wanting to empower civil society (more appropriately,
certain segments of civil society) so long as it supports the
bank's modernization projects.

The bank's conception of civil society, therefore, does not
consist of traditional, effective or community groups. Rather, it
consists of contractual, noneffective and noncommunity groups.

Within this category of civil society are professional groups,
trade unions, business associations and other voluntary
organizations, but not organizations representing the weak and
unfortunate.

Against such criticism, the bank has argued that though the
bank's good governance is undoubtedly liberal in origin, its
market-friendly policy recommendations have not been so much
derived from political or ideological considerations as from
technical and efficiency considerations.

Similarly, it seems to be quite unfair to characterize the
bank as being ideologically die-hard. It is not difficult to
support this claim. The bank is not insensitive to critical
views.

Facing NGOs' strong criticism of its structural adjustment and
impact on the poor in the 1980s, the bank has shown its
willingness not only to talk to its critics but also, more
importantly, to accommodate their concerns by giving greater
attention to the poor as manifested in its programs for poverty
alleviation, health promotion and education improvement.

Besides, the bank also seeks to increase its cooperation with
NGOs by involving them in its projects and by recruiting
personnel from NGOs.

All this indicates that the bank's good governance is going
along the path of humane governance. The bank's good governance
might not be humane governance yet, but a humane character is
certainly there.

The writer is a lecturer at the School of Social and Political
Sciences, Gadjah Mada University, Yogyakarta.